141 F.

3d 1185
98 CJ C.A.R. 1652
NOTICE: Although citation of unpublished opinions remains unfavored,
unpublished opinions may now be cited if the opinion has persuasive value on a
material issue, and a copy is attached to the citing document or, if cited in oral
argument, copies are furnished to the Court and all parties. See General Order of
November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or
further order.

NORAM GAS TRANSMISSION COMPANY, a Delaware

corporation,
Plaintiff-Appellee,
v.
ENTERPRISE RESOURCE CORPORATION, an Arkansas
corporation, Defendant,
and
Alan G. MIKELL, Defendant-Appellant.
No. 97-5170.

United States Court of Appeals, Tenth Circuit.

April 9, 1998.

Before BALDOCK, EBEL, and MURPHY, Circuit Judges.

ORDER AND JUDGMENT*
DAVID M. EBEL, Circuit Judge.

After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination
of this appeal. See Fed. R.App. P. 34(a); 10th Cir. R. 34.1.9. The case is
therefore ordered submitted without oral argument.

Defendant-appellant Alan G. Mikell appeals the district court's judgment in

favor of plaintiff-appellee Noram Gas Transmission Company. Because the
district court's findings are supported by the evidence, we affirm.

I. Background
3

Plaintiff Noram Gas Transmission Company is the successor in interest of

Arkla Energy Resources. In April 1989, Arkla entered into a settlement
agreement with defendants Mikell and Enterprise Resource Corporation to
resolve a dispute arising out of gas purchase contracts involving thirty-eight
wells in which Mikell and Enterprise owned interests.1 The agreement provided
for a prepayment by Arkla of two million dollars, to be recouped from future
gas production by defendants over a five and a half year period.

The agreement provided that Arkla could recoup its prepayment through cash
refunds from defendants under certain circumstances. Section 2(c) of the
agreement provided that if in any calendar quarter Arkla, or its designee,
requested delivery of a daily average volume of gas equal to those volumes
specified in section 2(b)(ii) of the agreement, and defendants failed to deliver
such volumes, Arkla would be entitled to a refund. These volumes were known
as the "minimum volumes." The agreement provided that requests for
minimum volumes could be satisfied out of the thirty-eight wells identified in
the agreement or from any other source.

In addition to the requests for minimum volumes, the agreement required Arkla
to make a monthly nomination of the percentage it desired of defendants' "daily
deliverability," which is an estimate of a well's daily capability of natural gas
production. Arkla could nominate gas only from the thirty-eight wells identified
by the agreement in which defendants had interests. When the agreement was
signed, the total daily deliverability attributable to defendants from the wells
was greater than the minimum volumes set out in the agreement. Thereafter,
defendants' daily deliverability declined to an amount less than the minimum
volumes. It is undisputed that Arkla/Noram always nominated one hundred
percent of defendants' daily deliverability.

The agreement also provided that upon termination of the subject contracts or a
judicial determination that defendants breached the contracts or the settlement
agreement, defendants were required to refund immediately the unrecouped
portion of the prepayment.

In August 1994, Noram Gas Transmission, as successor in interest to Arkla,

brought this action against Mikell and Enterprise. Noram alleged that
throughout the recoupment period there was a standing request for the
minimum volumes of gas set forth in the agreement, and that defendants failed
to deliver the requested amounts or make any refunds. Defendants responded

that Arkla, and later Noram, never requested the minimum volumes so as to
initiate the refund provision, relying on plaintiff's monthly nominations for
daily deliverability. Defendants counterclaimed against Noram for damages
resulting from Arkla/Noram's alleged breach of the recoupment provisions in
the settlement agreement.
8

After a bench trial, the district court found that Arkla/Noram had a standing
request for the minimum volumes set out in the agreement, that there was a
difference between a "request" for the minimum volumes from defendants and
a "nomination" of daily deliverability from the thirty-eight wells identified by
the agreement, and that defendants failed to deliver the requested amounts, thus
triggering the refund provision. The court found the damages provision of the
agreement, requiring reimbursement of the unrecouped balance of the
prepayment, reasonable. Pursuant to 12 Okla. Stat. 936, the court awarded
Noram attorneys fees jointly against Mikell and Enterprise.

On appeal, Mikell argues that the district court's factual findings are contrary to
the evidence; that the court erred in enforcing the liquidated damages provision
of the agreement; that the court erred in finding the settlement agreement to be
a contract for the sale of goods entitling Noram to attorneys fees; and that the
court abused its discretion in awarding attorneys fees jointly against Mikell and
Enterprise.

II. Breach of Contract

10

Mikell's primary argument on appeal is that the district court's factual finding
that Noram had a standing request for the minimum volumes of gas during the
recoupment period is contrary to the evidence. We must accept the district
court's findings of fact unless they are clearly erroneous. See Exxon Corp. v.
Gann, 21 F.3d 1002, 1005 (10th Cir.1994). A finding of fact is clearly
erroneous if it is without factual support in the record or if, after reviewing all
the evidence, we are left with a definite and firm conviction that a mistake has
been made. See Cowles v. Dow Keith Oil & Gas, Inc., 752 F.2d 508, 511 (10th
Cir.1985). We review the evidence in the light most favorable to the district
court's ruling and must uphold any finding that is permissible in light of the
evidence. See Exxon Corp., 21 F.3d at 1005; see also Anderson v. City of
Bessemer City, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985)
("If the district court's account of the evidence is plausible in light of the record
viewed in its entirety, the court of appeals may not reverse it even though
convinced that had it been sitting as the trier of fact, it would have weighed the
evidence differently. Where there are two permissible views of the evidence,
the factfinder's choice between them cannot be clearly erroneous.").

11

Here, the district court's factual finding regarding the standing request for
minimum volumes is well supported by the evidence. Several witnesses
testified that Arkla/Noram had a standing request for the minimum volumes
from both Mikell and Enterprise. See Testimony of James Nelson Cantwell,
Appellant's App. I at 221 (testifying standing request for minimum volumes
had been communicated to Mikell both by telephone and in face-to-face
conversations); at 229 (testifying Arkla/Noram had standing explicit and
implicit understanding that minimum volumes were requested each month to
accelerate refund); at 232-33 (explaining that even if daily deliverability fell to
zero, based on standing request for minimum volumes Arkla/Noram would be
entitled to refund); at 236 (testifying parties had clear understanding that
Arkla/Noram was requesting tender of at least the minimum volumes);
Testimony of Jeffrey Mark Holloway, id. at 277 (testifying that administrator
for Mikell and Enterprise agreed that under agreement Arkla/Noram expected
nothing less than the minimum volumes); at 281 (testifying that Arkla
communicated to Mikell at meeting that it expected nothing less than minimum
volumes); at 304-05 (testifying when agreement signed, Mikell and Enterprise
put on notice that Arkla/Noram wanted minimum volumes regardless of
deliverability); and Testimony of Michael Thomas Webb, id. at 398, 403-04,
405 (testifying that when administering settlement agreement for Enterprise, he
was informed on numerous occasions of Arkla/Noram's standing request for
minimum volumes); Appellant's App. II at 417 (same).

12

Evidence that Arkla/Noram only nominated Mikell's daily deliverability does

not require a contrary result, as there was testimony indicating that the
nominations for daily deliverability were separate and distinct from the request
for minimum volumes, see Appellant's App. I at 225, 228-29, 240, 245-46, 249,
Appellant's App. II at 416-17, 420, 484, and that Arkla/Noram could only
nominate the amount of gas that was deliverable from wells dedicated to the
contract, see Appellant's App. at 267-68, 280, 303-08, Appellant's App. II at
446-47, 449-50, 451.

13

Because the evidence is sufficient to support the district court's finding that
minimum volumes were requested but not delivered throughout the recoupment
period, the court's conclusion that Mikell materially breached the agreement by
failing to pay the required refunds is well supported. Therefore, Mikell's
argument regarding his counterclaim is without merit. Further, the district
court's findings in paragraph 23, regarding letters sent to Mikell demanding
payment and assurances of future performance and Mikell's failure to comply
with these demands, are based on undisputed evidence.2

III. Liquidated Damages

14

Mikell argues the liquidated damages provision requiring it to reimburse

Noram for the unrecouped payments upon judicial determination of a breach is
void because (1) there was no material breach of the agreement, and (2)
damages can be easily ascertained. As already discussed, the evidence supports
a finding that Mikell materially breached the settlement agreement. Further,
even assuming that damages could be easily ascertained, the liquidated
damages provision is enforceable.

15

Mikell cites several Oklahoma cases voiding a liquidated damages provision

when ascertainment of actual damages was neither impracticable nor difficult.
These cases are inapplicable, however, as they concern the general prohibition
on liquidated damages provisions found in 15 Okla. Stat. 214 and 215, rather
than 12A Okla. Stat. 2-718, which controls contracts for the sale of goods. As
the comment to that section recognizes, the provision permitting "reasonable"
liquidated damages in a commercial sales contract supersedes the general
prohibition in 15 Okla. Stat. 214 and 215. See Oklahoma Code Comment to
12A Okla. Stat. Ann. 2-718; see also 12A Okla. Stat. 1-103 (stating general
principles of law supplement code "[u]nless displaced by the particular
provisions of this act").

16

The district court's determination whether the liquidated damages provision is

enforceable as a reasonable forecast of anticipated damages will be upheld
unless clearly erroneous. See Buttes Gas & Oil Co. v. Winkler (In re Sierra
Trading Corp.), 482 F.2d 333, 336 (10th Cir.1973). We agree with the district
court that reimbursement of the unrecouped portion of the prepayment was a
reasonable assessment of damages in this case. Had Mikell honored Noram's
standing request for the minimum volumes throughout the recoupment period,
Noram would have recouped its prepayment. As Mikell's breach caused Noram
to pay for gas which was not delivered, it was reasonable to require Mikell to
refund the prepayment.

IV. Attorneys Fees

17

18

Mikell disputes the district court's award of attorneys fees under 12 Okla. Stat.
936, arguing that the settlement agreement was not a contract for the sale of
goods entitling Noram to fees. "We review de novo any legal conclusions that
provide a basis for an award under 936." Strickland Tower Maintenance, Inc.
v. AT & T Communications, Inc., 128 F.3d 1422, 1428 (10th Cir.1997). We
review the reasonableness of such fees for an abuse of discretion. See id.
Although the settlement agreement only supplemented the underlying gas
purchase contracts, we agree with the district court that the agreement was one

for the sale of goods. The contract called for payment of a sum certain, and
obligated defendants to deliver a particular amount of gas each month or to
refund the prepayment. See Arkla Energy Resources v. Roye Realty &
Developing, Inc., 9 F.3d 855, 859, 860-61 (10th Cir.1993) (affirming finding,
under Oklahoma law, that settlement agreement requiring payment of a
particular sum and obligating sellers to deliver gas upon request was an
installment contract for sale of goods); RJB Gas Pipeline Co. v. Colorado
Interstate Gas Co., 813 P.2d 1, 13 (Okla.Ct.App.1989) (holding contract
requiring seller to sever and deliver gas to buyer was a contract for the sale of
goods, even if gas not actually severed and delivered). Noram's claims against
defendants directly related to this sale, seeking reimbursement of sums paid for
gas which defendants failed to deliver under the contract. This case is
distinguishable, therefore, from Octagon Resources, Inc. v. Bonnett Resources
Corp. (In re Meridian Reserve, Inc.), 87 F.3d 406, 412 (10th Cir.1996), where
we held 936 did not apply because the subject of the lawsuit only tangentially
related to the sale of goods. Cf. ABC Coating Co. v. J. Harris & Sons, Ltd., 747
P.2d 271, 273 (Okla.1987) (holding applicability of 936 determined by
looking at underlying nature of suit; attorneys fees proper if damages arose
directly from rendition of labor or services, such as failure to pay for such
services).
19

Mikell also argues that the district court abused its discretion in awarding
attorney fees jointly against both defendants. His argument is limited to a single
conclusory assertion that a party is not entitled to fees if it fails to allocate the
fees it incurred between the parties. No authority is cited for this proposition,
and we have found none. By failing to develop this argument or cite any
authority to support its assertion, Mikell has waived this issue on appeal. See
Brownlee v. Lear Siegler Management Servs. Corp., 15 F.3d 976, 977 (10th
Cir.1994) (holding conclusory reference to district court error without citation
to legal authority not adequate appellate argument).

20

Even if we were to consider the merits of Mikell's argument, we perceive no

abuse of discretion in the district court's awarding damages jointly against the
two defendants. Mikell and Enterprise were related entities, owned interests in
the same wells, were sellers under the same settlement agreement, were subject
to identical responsibilities under the agreement, were sued in a single
proceeding for breaching the same provision, and were represented by a single
attorney. It is reasonable to conclude that Noram would have incurred the same
attorney fees even if it had sued only one of the defendants, and that the fees
were not divisible between the parties.

21

The judgment of the United States District Court for the Northern District of

Oklahoma is AFFIRMED.

This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally
disfavors the citation of orders and judgments; nevertheless, an order and
judgment may be cited under the terms and conditions of 10th Cir. R. 36.3

Although a defendant in the lawsuit, Enterprise Resource Corporation is not a

party to this appeal

Mikell argues that such findings are contrary to the district court's posttrial
order of August 8, 1996, in which the court ordered the parties to omit from the
proposed findings any reference to Noram's argument that Mikell repudiated
the contract by failing to provide adequate assurances. We note first Mikell's
failure to provide us a citation to the location of this order in the record.
Nevertheless, after reviewing the August 8, 1996 order we find no conflict, as
Noram's repudiation argument may well have been rejected based on the
parties' continued performance under the contract